11 Myths About CIBIL SCORE

February 5, 2018by Team CapitaWorld0


In the present scenario, CIBIL Score is gaining more and more attention from lenders and customers. But, even after a decade, the concept & functionality of CIBIL score has remained a mystery for most of the customers. Due to lack of clear understanding of the concept, a variety of myths & misconceptions are surrounding it in people’s mind.

Myth v/s Reality

Here is a list of 11 common credit score myths that are prevailing in the market:

1. CIBIL is the only source of getting credit score/report
The term CIBIL is more popular amongst the general public, so people use CIBIL & credit score interchangeably. However, it is not true.

The RBI has given permission to four credit bureaus (CIBIL, Equifax, HighMark and Experian) in India, who can generate a CIBIL report.

All of these four bureaus are equally qualified to provide credit report. Each bureau uses their own set of parameters to arrive at credit scores. So, the final credit score may vary sometimes.

2. CIBIL score reduces if we check the report
When a CIBIL score is checked for a customer, an inquiry is generated. There are two types of inquiry:

A. Soft Enquiry : When a customer checks his/her own CIBIL score, it is considered as a “soft inquiry”. It does not affect your score.

B. Hard Enquiry: If lenders (Banks, NBFC etc.) request a CIBIL to check customer’s score, then it is considered as a “hard inquiry”. More hard inquiry shows that customer’s credit worthiness is in doubt. That affects your score negatively.

3. Poor CIBIL score Rejects Loans
The poor CIBIL score doesn’t reject your loan application on its own. CIBIL assigns a credit score based on credit behavior of that particular individual. The final decision to approve or reject the case is in the hands of Banks/NBFC, where you have applied for the loan.

4. CIBIL has a comprehensive list of defaulters
It’s a common myth that CIBIL maintains a list of defaulters, which is not true at all.

5. No Loans lead to better credit score
This is an ambiguous belief among loan borrowers that if you don’t have any loans or credit cards, then you will have a good credit score. A person with no credit history will have a credit score of -1.

6. CIBIL can modify my information
Every month financial institutions submit the records of all loan borrowers to CIBIL. The CIBIL collate and unified all the credit details. They are not authorized to edit the details of any of the borrowers.

7. Zero effect of becoming Guarantor/Co-Borrower
Usually, people signed in on loan application as a Guarantor or as a Co-Borrower without understanding its legal implications. In reality, if the main applicant is not able to repay the loan, then the Guarantor or Co-Borrower is supposed to repay it. Moreover, his/her score is also adversely affected by the default of the principal borrower.

8. Good CIBIL score means confirm loan @ lower interest rate
You won’t get a loan at lower interest only on the basis of a good CIBIL score. The borrower is adjudged on the basis of one’s age, income levels, banking activity, past credit history, type of asset mortgage etc. If the lender is not satisfied on any of the parameter, then the lender can reject your application or offer a higher rate of interest.

9. Everyone is authorized to check my CIBIL
No. Either loan borrower himself or registered financiers like Banks, NBFCs, etc are authorized to generate your CIBIL score subject to you have filed an application for loan or credit card with them.

10. Your savings or investment will inflate CIBIL score
The credit score is purely dependent upon past repayment history of loan & credit cards of the individual. It has nothing to do with your saving account balance, mutual funds, insurance policies etc.

11. Regular ITR Filing means high CIBIL Score
The status of filing of Income Tax return has nothing to do with CIBIL score.


Nowadays, lenders are not extending any credit without CIBIL check. Usually, the higher score improves your chance of getting a loan approved. The lender will have more faith in your ability to repay the loan. That’s why every individual should have clear idea of the CIBIL score. You can check your CIBIL score online at CIBIL official website.

Hope this article has helped you in resolving some of your queries. If you have any query which pertains to CIBIL, then you can get free consultation here.

Leave a Reply

Your email address will not be published. Required fields are marked *


Live Chat

Was I helpful ?